Supreme Court to weigh in on Wetlands rules

November 7, 2005

Experts discuss what decision could mean for real estate developers

By G.M. Filisko
Inman News

Federal regulation of wetlands could be limited significantly depending on the outcome of two wetlands cases the U.S. Supreme Court in October agreed to hear. But if the regulation powers are curtailed, it won't mean that developers won't have to worry anymore about getting permits to develop properties with wetlands.

Some experts believe the U.S. Supreme Court agreed to hear the cases so that it could limit the scope of current wetlands rules under the federal Clean Water Act. Others, however, believe the court took the cases only to provide further guidance in the face of conflicting lower-court decisions. Which side is correct is anybody's guess, given recent – and upcoming – changes in the court's makeup.

The experts do agree, however, that even if the Supreme Court significantly curtails the federal government's authority to regulate wetlands under the Clean Water Act, developers will probably still need permits to develop property with wetlands. It'll only be a matter of which government entity – the Army Corps of Engineers, their state environmental or development agency, or a local agency – they'll need to work with to get the proper permits.

The cases the court agreed to hear are Carabell v. U.S. Army Corps of Engineers and Rapanos v. United States. Both cases arise out of disputes between Michigan landowners and the federal government over the scope of the Corps' authority under the Clean Water Act. Specifically at issue is whether the Corps can regulate wetlands that are part of the same hydrological system as a nearby waterway – even if the waterway is as many as 11 miles away – or whether the wetlands must directly abut a waterway for the Corps to be able to regulate its development.

What has court-watchers especially interested is that it was just four years ago that the court ruled that the Corps didn't have jurisdiction under the Clean Water Act over isolated, shallow wetlands used by migratory birds because there was no "significant nexus" between the wetlands and an "adjacent" body of water. That case, Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, was a 5-4 decision, with former Chief Justice William Rehnquist – who has been replaced by Chief Justice John Roberts – and Justice Sandra Day O'Connor, who has announced her retirement but has yet to be replaced, in the majority.

"Some people have interpreted the Supreme Court's acceptance of these cases as a strong indication that it intends to reverse the Corps' assertion of wetlands jurisdiction and to ratchet down jurisdiction further than it previously did in Solid Waste," said William Want, a law professor at the Charleston School of Law in Charleston, S.C., who wrote the treatise Law of Wetlands Regulation.

"I don't," Want said. He notes that the petitions for hearing to the Supreme Court stressed that federal appeals courts have disagreed on the scope of wetlands regulations and that there's been inconsistent application of Solid Waste by the Corps field offices throughout the country. "The justices may very well have taken the cases to provide more clear guidance for this muddled area," Want said.

"I think the Supreme Court took Solid Waste in 2001 to limit the Corps' jurisdiction. That's one reason it would take these new cases," said Roderick Walston, an attorney with Best, Best & Krieger in Walnut Creek, Calif., who specializes in natural resources and water litigation. "Another reason is that the lower courts disagree over what Solid Waste actually held," he said. "I think the Supreme Court took the case to resolve that question."

"The issue before the court now," Want said, "is the limit of what may be considered an adjacent wetland. The Corps says it's a wetland adjacent not just to navigable waters, but also non-navigable tributaries of navigable waters, including small streams that are only periodically inundated and man-made ditches. The Corps believes that interpretation is consistent with the Clean Water Act because those wetlands purify water that goes through them before discharging into navigable waters."

On the other hand, Want said, the landowners argue that the Corps has jurisdiction over wetlands only when the wetlands are immediately adjacent to navigable waters. "The court could side with either party or come out somewhere in between," Want said, "for instance, ruling that the wetlands have to be adjacent to tributaries of a certain size. It's very hard to predict what the court will do."

The Rapanos case is the more well known of the two cases before the Supreme Court because John Rapanos was convicted in a criminal proceeding of defying the federal government by filling in the wetlands on his properties with sand after being ordered not to do so. He also threatened to "destroy" an expert he'd hired after the expert refused to destroy all copies of his report stating that there were between 48 and 58 acres of wetlands on Rapanos' properties.

For his actions, Rapanos was fined $185,000 and placed on probation, but his case has bounced back and forth between the federal trial and appeals courts over whether he should be forced to serve prison time. The criminal case is on hold while the Supreme Court hears Rapanos' civil case.

Rapanos' civil case challenges the Corps authority over his properties altogether. In the civil case, Rapanos alleges that the Corps has no jurisdiction over the wetlands on his properties because the properties are 11 miles from the nearest navigable waterway. The Corps, however, says Rapanos' property is part of the same hydrological system, as a result of tributaries and other waterways, as the nearby waters of the United States; therefore, the Corps argues, it's within the Corps' jurisdiction.

The trial court agreed with the Corps' reasoning, holding that the Corps had jurisdiction over Rapanos' property. The 6th U.S. Circuit Court of Appeals, based in Cincinnati, upheld the trial court's decision, prompting Rapanos' appeal to the Supreme Court.

In Carabell, the Corps denied a permit for Macomb County, Mich., landowners to develop a condominium complex because their property contains about 15 acres of wetlands that would be filled in by the development and the landowners failed to rebut the presumption that there were less damaging practicable alternatives to their proposal. Like Rapanos, the property owners challenged the Corps' jurisdiction over their property, asserting that the wetlands on their property were isolated from all outside waters and, therefore, didn't fall within the Corps' jurisdiction.

As in Rapanos, the trial court and 6th Circuit U.S. Court of Appeals held that because the property was adjacent to tributaries that feed into navigable waters (specifically Lake St. Clair, about a mile away), it had a "significant nexus to 'waters of the United States'" and fell within the Corps' wetlands jurisdiction.

If the Supreme Court limits the Corps' jurisdiction over wetlands under the Clean Water Act to only wetlands abutting waters of the United States, "that won't effect what developers will have to do" in most cases to get permits for wetlands development, said Carter H. Strickland, Jr., acting director and assistant clinical professor of law at the Rutgers Environmental Law Clinic in Newark, N.J. "Quite a few wetlands will remain under Corps jurisdiction because they abut waters of the United States. But more remote wetlands will really be up to states to govern. So even if the court holds that non-abutting wetlands are isolated and outside the reach of the Clean Water Act, developers may still need to apply for state permits," he said.

"Only two states – Michigan and New Jersey – have delegated wetlands programs," Strickland said, referring to states to which the Environmental Protection Agency has delegated its wetlands permitting power to the state. In those states, developers who need permits for most wetlands areas – both isolated and non-isolated – must apply to the state, not the Corps, and they'll continue to do so.

Other states, such as New York, don't have "delegated" programs, but developers must still apply to the state for permits to fill wetlands depending on the size of the project. Those existing permitting powers will also continue even if the court cuts back on federal authority.

For states that don't have wetland programs at all, Strickland said, it's not clear what the permit process will be if the Corps jurisdiction is limited only to abutting wetlands. In those cases, states may have a greater incentive to begin to regulate isolated wetlands, according to Strickland.

Oral argument for both cases is expected in February 2006. The court will issue its opinion by July 2006.

"I have no sense how this might come out. It'd be pure speculation" to guess, said M. Reed Hopper, principal attorney with the Pacific Legal Foundation, a California law firm representing Rapanos. "It bodes well that the court took this case after so many cases have been turned down," Hopper said. "It's hard to read too much into it, but perhaps the court is willing to rule, we hope, in Rapanos' favor."

Efforts to reach the Carabells' attorney and the Department of Justice attorney representing the Corps were unsuccessful.

Copyright 2005 Inman News

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